Aukera raises $15 million from Peak XV Partners, Fireside Ventures

The government has reduced duties, funded research into lab-grown technology, and promoted the sector as part of its Make in India push.

Lab-grown diamond jewellery brand Aukera has raised $15 million in a funding round led by Peak XV Partners, with participation from existing investors Fireside Ventures, Sparrow Capital, Prath Ventures and Alteria Capital.

It plans to use the capital to double down on offline retail, expand its omnichannel offerings, and invest in product innovation and brand-building, the Bengaluru-based startup said on June 30.

Moneycontrol was first to report about Aukera's new funding round.

“Our biggest investments will go into scaling physical retail,” co-founder and CEO Lisa Mukhedkar told Moneycontrol. “Offline continues to be the strongest revenue driver but we’re also investing in technology and marketing, especially to educate consumers on the value and quality of lab-grown diamonds.”

The company, which launched its first store in August 2023, operates 13 outlets in Bengaluru, Delhi-NCR and Hyderabad. Two more stores — in Delhi and Bengaluru — are expected to open over the next fortnight.

Aukera is clocking a Rs 200-crore annualised revenue run rate and is targeting Rs 1,000 crore in revenue within the next five to seven years.

“We’re building a long-term, legacy brand rooted in consumer insight,” she said. “Women have long been frustrated with the size, quality and price of mined diamonds. Aukera solves that. They’re now choosing grown diamonds not because they’re cheaper, but because they’re better.”

The funding also marks the entry of Alteria Capital as an equity investor in addition to its existing debt partnership.

“Our focus now is to scale our footprint, elevate our brand, and push our omnichannel capabilities,” said co-founder Kumar Saurabh.

Aukera’s supply chain is built around high-grade grown diamonds sourced through strategic partnerships and jewellery that is manufactured to global standards in India, he said.

“It’s a highly India-centric supply chain now. From growing to finishing, India has become the hub for the best quality lab-grown diamonds,” Saurabh added.

Addressing concerns around pricing, he said lab-grown diamond prices have stabilised over the past year as production shifted to India and China.

“The sharp fall in prices globally was simply the result of manufacturing moving from expensive setups in the West to highly competitive ecosystems here,” he said.

“This narrative of crashing prices is often pushed by legacy miners but consumers are smart. They see through it.”

Market sparkling bright

This comes at a time when the Indian lab-grown diamond market is seeing an influx of new players, be it startups or legacy operators.

While the lab-grown segment is getting crowded, Mukhedkar said Aukera’s competition is less from startups and more from mined diamonds, which still make up 95 percent of the Indian jewellery market.

“The seismic shift is already underway. We believe brands like us that are built ground-up for this category will emerge dominant, just as you’ve seen in the mined diamond space,” she said.

The founders said they’re in no rush to expand globally. “We’re eyeing a 500-store footprint here before looking overseas,” Mukhedkar added.

The industry is also getting a push from policy tailwinds. The government has reduced duties, funded research into lab-grown technology, and promoted the sector as part of its Make in India push.

“The Prime Minister gifting a grown diamond to a US head of state was a strong signal. The government sees this as a strategic and sustainable sector for India," Mukhedkar said.